I believe there's a type in these numbers

Installations & Python Packages
1

Course Name: Python For Trading!, Section No: 6, Unit No: 2, Unit type: Quiz

2

Hi Gian,



The answers are correct, please convert the annual rates to daily rates before you plug them into the Sharpe ratio equation.



Hope this helps!

3

Hi Gaurav,

could you pls explain why you're calculating the daily rate by dividing the annual rate by 252 and not by 365?



idaily = i annual / total days in year



thx

Gian 

4

Hi Gian,



You are correct, the treasury yield should have been converted to daily rates on a 365-day calendar and not a business day calendar. 

Having said that, we are improving that question to dispel any confusion regarding annualized returns. The reason to give the risk-free rate now in daily terms is to essentially focus on the Sharpe ratio knowledge and not on the skills required to convert an annualized rate to a daily rate.



Thanks!